In 2008, I started to become very interested in learning more about economics. There are several reasons for this including the fact that a friend had recently started a PhD in the subject and the fact that the financial crisis was starting to bubble over. I hda also been listening to the EconTalk podcast for some time by then and wanted to learn more. Several years earlier, I had taken an undergraduate economics course and it was awful; boring charts and math that seemingly had nothing to do with the real world. Then, I happened to come across some books that helped me learn more about the topic. In this post, I’m going to describe some of them and what I learned from them. One of the most important things I learned about economics is that it goes far beyond the world of business; it is a social science that can be used to explain and investigate all kinds of events and behaviour.
The Economic Naturalist by Robert H. Frank
This book is highly readable and really provides a good introduction to the fundamental principles of economics, including incentives and supply and demand. And yes, it is free of abstract diagrams that make you scratch your head in confusion. The book is also incredibly engaging due to its unique format. For years, Frank has assigned his students the task of seeking to explain some aspect of daily life using economic principles. The catch is that they have to answer the problem in 500 words. That kind of restraint was very productive and you get all kinds of interesting questions asked and answered in this book. In contrast, I was much less interested in Frank’s 2009 book, The Economic Naturalist’s Field Guide: Common Sense Principles for Troubled Times, which collects his columns from the New York Times and other sources. There are some interesting sections there but it doesn’t give you the kind of education his earlier popular book provides.
You also can read the first chapter of the Economic Naturalist for free online. If you want to get a sample of Frank’s newspaper style writing, you can read some of his writing for the New York Times. If you’re curious to kno w more about Frank’s views on the current sorry state of economics education, his interview on EconTalk is the place to go.
Discover Your Inner Economist by Tyler Cowen
Tyler Cowen is an economics professor who is also co-author of the Marginal Revolution blog, one of the best economics blogs I’ve read out there with posts on all kinds of topics. DYIE is a conversational kind of book that is endlessly fascinating and gives you a sense of Cowen’s wide ranging interests. He looks at topics ranging from dentist to dining around the world (e.g. he argues that poor countries or neighbourhoods tend to have better food than rich areas since the main cost of really good food is labour). It was a lot of fun to read but it does not come across quite as strongly as other books I’ve read. At times, it is a weird blend of economics and self-help; a combination that seems promising but ultimately doesn’t quite work. His blog, mentioned above, is well worth a read though be prepared for a variety of topics there too.
Freakonomics and Superfreakonomics by Steven D. Levvit and Stephen J. Dubner
These pair of books (the original in 2005 and the “super” one in 2009) can be credited with creating a great deal of popular interest in economics. After all, where else are you going to find economists trying to explain the economics of drug gangs and prostitutes? That’s much more sexy that trying to price mortgages or deriveratives. Both authors have got a lot of attention out of these books and they write a fun NY Times blog on economics too. These are probably the most page-turning economics books you’ll ever read but you might well end up feeling a bit dissatisfied. There’s no conclusion or effort made to draw larger conclusions; you just get a bunch of case studies on a seemingly random set of topics. Would I recommend the books? They’re fun to talk about and read very quickly but I don’t know that I’d consider them to be all that great. BUT, if you think economics is boring and just about topics like interest rates, then you should read Freakonomics.
The Freakonomics books are probably the most book-club friendly of the books discussed here but I wonder at their enduring value. For me and others, they showed that economics can be used to discuss and understand problems outside of business school and the stock market, and for that, they deserve some credit and recognition.
Filthy Lucre: Economics For People Who Hate Capitalism by Joseph Heath
This is one unique book written by Canadian philosophy professor Joseph Heath and it has a unique structure. Heath systematically looks at economics points routinely misunderstood by the political left and right and takes them apart. I couldn’t find a part of the book online, but there’s an extended interview with Heath on YouTube that gives you an idea of what the book is about. For example, Heath attacks the idea capitalism is somehow natural and good (regulation is needed to make it work well), for example. Heath also discusses the fallacy that taxes eliminate wealth or the economy; taxes pay for education, schools, public health programs, regulation and the framework of rules that makes life relatively pleasant and safe. If you’re more interested about the relationship between politics and economic arguments, this is a good book to consider. Neither the traditional political right or left has a monopoly on economic wisdom.
The book also has a damn good cover (a pig capitalist!) and that’s part of the reason that I first picked it in the bookstore. The ultimate appeal of this book is the philosophical way Heath approaches the topic, the way he brings politics into the discussion. Economics is a challenging topic and figuring out how to explain the world is a challenge, but I think these books help you get started. It is not a mystery and more people should get interested in the topic and see how it can apply to other aspects of life beyond the traditional areas of economic interest like business, interest rates, investment and so forth.